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Palm Coast Concedes: Keeping Golf Course At Taxpayers’ Expense No Longer Tenable

| February 25, 2016

palm coast palm harbor golf club

Palm Coast’s Palm Harbor Golf Club never lived up to its promise. (Palm Coast)

If Palm Coast government’s eight-year efforts to stanch taxpayer losses at the Palm Harbor Golf Club have been the equivalent of slathering lipstick on a pig, the city’s more recent “rebranding” attempts have as if soaked up the late Tammy Faye Bakker’s stash of make-up: the more the city has projected improvements or schemed to dissimulate deficits, the heavier the losses. Last year’s red ink ran the deepest.


This year’s appears little better, even with the city’s chief make-up artist deciding to paint the latest portrait of the failing enterprise: the reason City Manager Jim Landon did so Tuesday morning, he told the city council, “is that on staff I’m one of the few people involved with actually having the city start the Palm Harbor Golf Course that’s still here today, and also the tennis center. It was one of the first projects that was handed to me by the previous manager. So I thought I would probably be the best person to tell the stories.”

And this time, the make-up was kept to a minimum as the city has reached the point where it’s realized that keeping things as they are is no longer tenable, no matter how the operation is sliced—as an “amenity,” as a business or as a trickle-down, stabilizing benefit to the surrounding neighborhood.

The Palm Coast City Council’s realization, albeit slow and reluctant, is following the same path as its realization that its red-light camera program, which the council so cherished for so many years, was more harmful than beneficial to the city. As with red-light cameras, the city is positioning itself not to sever the program outright, but to gradually pull away by minimizing its own exposure.

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Landon cautioned that this latest presentation on the golf course was not intended as a financial sum-up of any sort so much as a history on how the city ended up with the golf course and the tennis center “and some of the issues and history of all that.” Nevertheless, it was the first time even he conceded that the future of the golf course can no longer be a repetition of its losing past. He was not much more sanguine about the city’s tennis center, which has suffered its own annual losses, but in somewhat smaller amounts.

So his presentation was, going back to the ITT days in 1971 and the subsequent golf courses that opened locally since, when golf was still a viable business, as it hasn’t been since the mid-2000s. Ironically, Palm Coast acquired the Palm Harbor Golf Club in 2008 well into the housing—and the golf industry—crash. The Centex company, which was bailing from its local development, was donating the property to the city. But it was a loaded donation.

“At the time it was promised that we can open this golf course and it would pay for itself and we would not have to subsidize it with tax dollars,” Landon said. “That was based on average rounds of $46 a round.” (Today it’s around $26 a round.) And that was based on 40,000 rounds a year, which the golf course matched only once, and not at the $46 price. The rosy picture was also based on other public golf courses converting into private clubs.

“Well, none of those assumptions happened,” Landon said. “So we were not able to meet those targets and have not since day one.”

Landon never explained why, since day one, the city did not explore changing course rather than continuously pumping tax dollar subsidies into the enterprise. He jumped right to 2015 to repeat what he has claimed previously: that the golf course is like other city parks and recreation “amenities” that don’t make money. But city parks are not run as businesses. The golf club is. So is the tennis center. It’s run by KemperSports, an Illinois-based company, has been since 2009.

Palm Coast Golf and Tennis Operation Losses, 2009-2015

YearGolf Course Operating LossesGolf Course Losses With DepreciationTennis Center Losses
2015$346,191$561,191$85,000
2014$292,887$563,031$99,543
2013$125,669$397,361$105,002
2012$68,651$340,342$110,022
2011$152,199$422,786$172,198
2010$413,183$663,060$121,015
2009$82,672$84,219$89,044
Totals:$1,481,452$3,031,990$781,824
Capital spending on Palm Harbor Golf Course Palm Coast wrote off: $5,534,878.
Combined tax dollar spending and losses on golf and tennis operations that the city will never recoup: $9,348,692.
Sources: The figures for 2009 through 2014 are taken from Palm Coast Government's annual audit reports. The figures for 2015 are taken from a January 12, 2016 presentation by KemperSports. The depreciation figure for that year is an estimate based on the average depreciation of the previous six years.

The latest contract was signed for two years by a reluctant council that decided that come this year, the city might look at alternatives. Landon said the procurement process can start soon. “Instead of going out and doing the same old same old is actually start the discussion with city council as to what that procurement process ought to be,” Landon said. “We talked about instead of having a management company”—that is, KemperSports—“actually looking at the idea of leasing it.” One company has shown interest in doing so. If that doesn’t work out, it could go back to a management company, Landon said. If neither of those options works, the city could take over fully.

“In previous discussions, and I don’t want to belabor the point because I’ve been down this road many, many times,” said council member Bill McGuire, who’s been the strongest critic of the city’s ownership of the golf course, “the central issue here is there simply aren’t enough customers to make that golf course a paying proposition no matter how well it’s managed. If people aren’t going to pay to play there, the greatest management team isn’t going to make a difference.”

Council member Jason DeLorenzo favors starting the procurement process sooner than later. “I want to hear all the options,” he said, “but paying a management company to run it as an amenity and lose money seems like the worst of the options, because we could run it ourselves and lose money. Why pay the management company to lose money?” Leasing, however, remains DeLorenzo’s primary choice. That would absolve city taxpayers of subsidies, leaving it in the hands of the lease holder to succeed or fail.

If the city were to run the facility, the savings would not erase the deficit, but losses would be less steep if the city were to take over, Landon said. McGuire said the city could save $30,000 to $60,000, but not more. “We’d have to hire somebody to run it and promote it,” he said.

Mayor Jon Netts cited Flagler Beach’s recent decision to buy and lease a golf course at the south end of town and run it as a nine-hole course. Based on that experience, Netts said, Palm Coast could explore turning Palm Harbor into a nine-hole course. Meanwhile Netts said the city should explore either a lease or a take-over.

The administration will be putting options together. “What I don’t want to do is what we did in the past and be surprised,” Landon said. But he noted that if the city were to go in a different direction with the golf course, it would have to do so with the tennis center as well, since Kemper manages that operation too. But if the city were to seek leases, Landon suggested separate leases.

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29 Responses for “Palm Coast Concedes: Keeping Golf Course At Taxpayers’ Expense No Longer Tenable”

  1. shy guy huhn says:

    This is another example of the city council oiling the sweeky wheel. This council is so narrow minded they will spend millions on walking trails, parks, boat landings and town center upkeep with no finacial return but the enjoyment and health of the citizens and visitors. Holland park for example. At least the golf course returns revenue. Get off this crusade to ruin this coures. It seems none of you are golfers.

  2. DeeDeeDee says:

    Go ahead and save your tax dollars so you only have to pay what should be a full time position, peanuts to hold office and make these sorts of stupid decisions. Palm Coast majority voters get every bit of what they deserve because they keep electing retirees who lack the depth and intellect to confront complex issues.

    Not to imply this issue was terribly complex to begin with.. I think we all know golf courses in this state are a dime a dozen and rarely ever produce the return on investment we are led to believe. Unfortunately it’s just politically “sexy” to tout such nonsense to prospective home buyers and corporate CEO’s.

    Sonmany problems and no problem solvers anywhere in the mix. So continue to elect your retirees and let the professionals to other communities. Oh and watch your home values and population decline accordingly

  3. Barry Hartmann says:

    It was a loser from day one ….. Time to cut our losses.

  4. Anonymous says:

    One or 2 golfers a day,big deal…..this is not a retirement city,it’s full of people that work day jobs now,and if not employed simply can’t afford to play golf….which also is an ancient game Noone cares about anymore.

  5. Knightwatch says:

    The city should keep the golf course, even at a cost. It is an important part of the ambiance and lifestyle here. No golf course, no tennis court, maybe no marina … we’re nothing but another highway stop with an overabundance of pizza shops and mattress outlets. Yay.

  6. Shark says:

    Let’s get rod of it along with Landon !!!!!!!!!!!!!!!!

  7. Kendall says:

    Jim Landon …. told the city council, “…that on staff I’m one of the few people involved with actually having the city start the Palm Harbor Golf Course that’s still here today…”

    And he drove this fiscal wreck of a bus! Why the hell is he still here?

  8. Outsider says:

    I no longer live in Palm Coast but am a resident of Flagler County. I play the course only occasionally with some friends, and if it closed it would have no impact on my life. However, there are many older residents, particularly from that part of town that do play. I think closing the course will be detrimental to the city, as there will be no reason to live in the “F” section, and the current residents will move or pass away. Many of the homes are older but well maintained, I believe because of the golf course. If it were to close or go downhill, you will end up with another “R” and “P” section in that area as well. The property values will go down and tax revenues will drop accordingly. I would strongly suggest you reconsider the minimal amount of money per resident these venues require, and decide if you really want to create another ghetto in Palm Coast. Again, I have no dog in this fight. I will say we saw the the writing on the wall years ago as to the direction Palm Coast proper was headed so we left P.C., the Matanzas Woods area speciifically. It was the smartest thing we ever did judging by the current condition of that course and the neighborhood. Don’t cut off your nose to spite your face, but I have a feeling you will anyway.

  9. confidential says:

    Agreed with Knightwatch!!
    Cost us $350,000 a year to sustain golf and tennis courts? If we have 75,000 houses in Palm Coast is 5 bucks a year in our homes taxes. If those amenities are gone we will loose far more than $5 bucks a year in the value of our homes…can you all figure that out? Councilman McGuire’s short sighted vision for the future of Palm Coast can’t envision that as of course, what would he care as he is heading back to MO were he came from? The biggest losses on homes prices and lifestyle value will materialize when these two sports courses will cease to exist. How come Mr. McGuire didn’t complain against the 15 millions plus cost of the city hall and just for the start…tell me how much is now the yearly maintenance please!
    Residents, home owners, walkers, joggers besides golfers and tennis players enjoy our courts or benefit from their existence! They may need better management but be aware of what we wish for…The beauty of our east side of I-95 is also at stake here. I sure remember the mess we had here for few years until we battle for the golf course and was donated to us to spend 5 million and reopen it.

  10. confidential says:

    I should adjust my figures as maybe a cost of 8 to 9 bucks a year in our home taxes to sustain our golf an tennis courts and prevent to be turned into a ghetto like very well Outsider envisions as well. Thank you Outsider. I have my home value, visual enjoyment and future safety at stake here.

  11. Will says:

    The City spends over a hundred million dollars a year to provide services and amenities for our residents. Our tax millage rate is the second lowest rate for similar sized cities in the State of Florida. When the City was first incorporated, citizens were concerned that there were many golf courses, but were not affordable for most residents. The original effort by the Council was to provide such a facility. It, like all of our parks, ball fields, walkways, and beautified medians, etc. was not designed to make money, but to provide the Community with an excellent q

  12. Will says:

    quality of life at an affordable tax rate.

  13. Dennis says:

    Interesting article. Just yesterday, myself and some 70 golfers with an 8:30 am start time, played golf despite the wicked wind and rain that came our way. I support Palm Harbor Golf Course as I am sure many others do because of the friendly and professional staff they afford us golfers.
    I understand those that do not play the game don’t support this venture the city entered into with Kemper Sports. Is there a less expensive way to keep the golf course? I don’t know. What I do know is that converting it to a 9 hole course will put an end to it ever being close to profitable or breaking even to the city. Mayor Netts suggested this according to the article. The only time I’ve ever seen him there he was enjoying a meal. Guess he’s not a golfer!

    Like most of you who comment here I pay taxes too. I don’t have children and don’t complain about contributing to the education of the children because it benefits us all as well as the kids. I don’t complain about the constant work I see going on in the median on Belle Terre Pkwy., even though I know it doesn’t produce a profit for the city and taxpayers. We have parks and bicycle trails that require maintenance, that don’t produce a profit for the city. It does however contribute to the opportunity to live a healthy lifestyle for those of us that live here.

    I also know that through Kemper Sports and Palm Harbor Golf Course many youth programs are held at Palm Harbor. Last summer I saw a very large program being conducted for kids that I would estimate to be under 10. I also know that one of there Golf Pro’s provides lessons for high school kids. In fact there is a scholarship golf tournament coming up for the local high School kids. (Money raised will go toward scholarships.)

    So lets take into consideration the positive things that come out of this venture the city has entered into.

  14. psness says:

    This is one of the nicest municipal courses I’ve ever played. At current green fees, it is a great “buy” and it could successfully raise rates while continuing to compete with the nearby public courses. I agree with a previous reply that without it and other amenities, PC would just be another stop along I-95. There are few alternative uses, as it is basically land-locked. Converting it to a 9-hole course is not a good idea. It would be less attractive to golfers, fewer would play there and anecdotally I think the income would decline more than expenses. The town taking it over would be a possible alternative, it would at least cut the deficit somewhat. Leasing it seems like the best idea to pursue. But letting it go fallow would be a disaster and adversely impact surrounding property values. Check out the deterioration of the area surrounding the course in Flagler Beach.

  15. Kevin says:

    This course is an asset to Palm Coast and not just for those who use it but all taxpayers. The amenities of our city are many, playgrounds, walking trails, etc.. IfmI don’t have children who use the playgrounds I don’t complain that they are a waste of money. If I decide not to walk the trail system, I don’t complain about the cost to acquire and maintain them. The same logic should be applied to these town assets, they add value to our sense of place that is Palm Coast. Keep the course 18 holes, do an analysis to determine if city employee management is economically feasible vs hiring a private management company and promote the golf and tennis along with all of the other wonderful benefits of living in Palm Coast. Otherwise, we might as well roll up the sidewalks and call it quits at building a diverse and active community worth living in.

  16. Michael Brown says:

    NO ONE CARES ABOUT GOLF ANYMORE

  17. David B says:

    The city has changed. I don’t believe the demographics of Palm Coast favor a city owned golf course. The city has a median age is 51 years old. Most are working families, and either don’t have the time to spend 4 or 5 hours playing, or can not afford to play. I think the city could use the land for perhaps developing a disc golf course, bike trails, and running trails.

  18. confidential says:

    My appreciation to Dennis also for his realistic description of the benefits of our Palm Harbor Golf Course to us all in this city.
    To Barry, Anonymous, Shark and Kendall, probably you have children or grands in school and you do not hear us complaining about the highest taxes we pay that are the schools when we no longer have any kids in school. Probably you also use our walkways, parks and free boat ramps that we also pay to build and maintain then why you agree with city councilmen and mayor to criticize our taxes used for our golf and tennis courses? That you guys do not like the sports or practice it should not afford your critique. I am not a golf player but sure appreciate the value these sports and courses give to our city and properties. Our citizenry owned golf course makes it affordable to our community and no longer is a display of bourgeoisie= affluent, among us but instead of a beautifully cared and safe sport practice course.

  19. Rich Mikola says:

    Keep both facilities. They are assets to the city, just like parks and trails, etc. If you want to save money, eliminate the thousands spent on the medians. I don’t golf or play tennis and don’t mind contributing to both. The city is not in business to make money, but to provide a quality of life for it’s residents. I also don’t believe the city employees should be running the venues, the government has never been shown to run anything competently. Costs will skyrocket and don’t forget employee pensions.

  20. Ga boy says:

    I live here, pay taxes here, and have never played a round of golf in my life, however, if have to agree with comments who insist on not letting it become a weed patch. I love the trails, and look of most of this city, if the city takes it over at a lower cost, this would be a plus, because your creating more jobs, it doesn’t have to be pebble beach, but keep it green, and playable. Now Landon on the other hand is a laughable politician, the way he back peddles, and says it’s no longer a viable option, (the people have spoken) Ha! Go back to his previous statements, on the red light cameras, and the golf, and tennis, if you really want to save money get rid of his ridiculous high salary, and not only his but there are so many high paying jobs in our local government, that are so called promoters, and that’s the first thing he talks about hiring if the city takes it over, do the research, it will shock you. Has anyone seen the episode of the Simpsons where the salesmen comes to town to sell them a monorail, its so funny, and will remind you of this place

  21. Not a golfer says:

    The golf course is an asset to the surrounding neighborhoods. Which is an older one but well maintained. And I believe people moved there to be close to the golf course. Even if not to play just to have the serenity of the well groomed course. It gives people a feeling of pride to keep there homes and neighborhood clean. Without the golf course there would be a downturn in the area. Palm Coast should be trying to draw people in, not turn them away by seeing an overgrown course and a falling apart neighborhood.

  22. Buy Local says:

    It’s hard to believe the Kemper sports is managing this golf course for a total profit of $30-$60,000 a year.

    Certainly running the golf course ourselves could save more than that.

  23. confidential says:

    Thank you also to Rick and Ga Boy for the support of our common sense. We better be ready to go to this council board meeting when addressing this issue otherwise the five will dum our golf and tennis courses and with that the beauty surrounding and value of our homes in Palm Coast, beside denying the affordable practice of these two sports to our citizens. Jeez our taxes keep on going up and county, city and schools keep on taking away our services with ridiculous excuses like “saving our taxes” BS.
    Look at the 4 minions in the school board and their attorney after buying Corporate one for 3.5 million of our hard earned taxes in 2000 now they want to pay close to 200,000 to demolish the building to sell it (to some well connected probably already waiting on line) for close to one third of the cost. Meanwhile I just learned that preparing the turf, over two years ago they kicked from that Corporate One our adults and children with disability taking their rehab classes there and forcing their families to have to drive them to farther locations like A1A in Flagler Beach for that vital groups rehab courses. Also the paid adult education classes were booted as well. Why do we allow these shenanigan’s to benefit the well connected while denying the services we pay for with our taxes? Who gives attorney Gavin that we all pay for, her omnipotent self righteous idea to denied the peoples input on her supported demolition?

  24. Murray says:

    Excuse me…if we kill all the ” Gophers ” who’s going to play “Goph ” ?

  25. Just me says:

    I also dont play golf or tennis and belive the two in question should stay as part of our “park system”. That being said We must voice our opinions the next time the city looks to build buy a facility that will cost ALL of us but be used by a small % of us.

  26. Just me says:

    I also pass by that golf course Daily and always see multiple people out there playing. They are our fellow citizens enjoying a restively low cost pastime. I belive to cost us all les it should either be totally run by the city or leased out.

  27. Kendall says:

    @Confidential I haven’t weighed in on the golf course, only on my opinion of Jim Landon as our city’s chief steward. But I will be honest. I had been of the opinion that the city should step back from operating these money puts but reading through the comments here, I have changed my mind and am more inclined to view these amenities as lifestyle benefits similar to parks and paths.

    But from a business perspective, Kemper may not be the right management company and the current business model may not be ideal. Someone mentioned raising prices a bit. Perhaps that is a good idea.

    I don’t know how golf memberships work or if they exist. Are there discounts for city residents? Frequent golfer club that offers lower rates or benefits? Are we marketing to surrounding areas? Are we leading efforts to pull golfers in from other markets with promos and events?

    I know when the tennis facility opened it was designed to exclude everyone except an elite group of members. Is that still the case?

    As the wheels turn I see lots of opportunities but no efforts to change something that is broken.

  28. J.D. Graham says:

    I was employed for many years by a midwestern city which had two municipal courses. One is an older (1930) nine-holer, the other a modern (1980) eighteen, both run by Kemper Sports. That city had the same problems in the late 1990’s into the 2000’s now being experienced by P.C. The city finally got rid of Kemper, took over management of the nine-holer themselves, and went with a different company for the eighteen holer. The nine-holer quickly went out of the red into the black (no mortgage to pay off), and the losses at the big course were reduced significantly.
    I agree completely that Palm Harbor G.C. is a community asset, even with substantial subsidies. It, and others like it around the country, were designed to draw in new residents and enhance their quality of life. Like our hiking and biking paths (which I love) It continues to serve that purpose.
    Unfortunately, the golf industry has not adapted to our changing society. Maybe council needs to solicit a group of volunteers (with no ties to Kemper or specific council members) to form a temporary committee to suggest changes in how ALL aspects of the course should be handled.

  29. ryan says:

    I agree with many of the comments as to keeping Palm Harbor. The problem that persists is how to make it pay for itself. There has to be a creative way to handle this. The city should take it over and find a way to make it viable. There has been great incite by some commentators. Get them together and brainstorm.

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